High appetite for T-Bills even as central bank lowers yields

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Investors’ appetite on government debt instruments have continued to remain high, after the treasury bills floated by the Bank of Tanzania (BoT) on Wednesday this week ended up being oversubscribers.

Dar es Salaam. Despite lowered yields, the Treasury bills floated by the Bank of Tanzania (BoT) on Wednesday ended up being oversubscribed by Sh32 billion.

The government was seeking to borrow Sh141 billion from the market, but a total of Sh173.9 billion was tendered through 103 bids.

The auction results summary published by the central bank shows that weighted average yields per annum was lowered to 8.53 per cent on Wednesday this week from 8.81 per cent recorded during the previous auction held on March 6.

Yields for one month increased to 3.30 per cent on Wednesday’s floating from 3.24 per cent while the three-month maturity was set at 3.86 per cent from zero rated during the March 6 auction.

The six months maturity was lowered to 5. 11 per cent on Wednesday this week from 5.21 during the previous auction, while one-year maturity yields went down to 9.14 per cent from previously 9.17 per cent.

At the end of auction the central bank accepted Sh171.1 billion, higher than the amount sought. This is the second time the central bank accepts bids beyond the amount sought as last auction, Sh170 billion was accepted contrary to the Sh141 billion sought.

During Wednesday’s auction, most of the bids were recorded on one year maturity which resulted into subscription of Sh147 billion surpassing Sh104 billion sought. Other maturities including 35-days, 91-days and 182-days recorded lower tendered amounts than required.

The report shows that a total of Sh850 million was tendered on 35-days maturity against offered Sh1 billion while three and six months maturities received Sh600 million and Sh24.5 billion respectively lower than Sh3 billion and Sh33 billion sought respectively.

The highest bids were ranging from 91.93/100 to 99.69/100 while the lowest bids ranged from 91.40/100 to 99.60/100, but the central bank accepted minimum successful prices ranging from 91.65/100 and 99.68/100.